Local Company Will Help Your Aging Skin

Wednesday

Apr 11, 2012 at 6:00 AM

By Peter S. Cohan WALL & MAIN

In October 2011, I interviewed Yael Schwartz, CEO of Hygeia Therapeutics, Inc., a biotech start-up based in Holden that’s trying to develop a special form of an anti-androgen that can treat acne, excess facial hair, hair loss and an estrogen that can treat urogenital and skin problems that face menopausal women.

On April 9, I interviewed Dr. Schwartz to learn more about a licensing agreement that a Hygeia spinout made with Ferndale Pharmaceutical Group to sell a product that improves the health of skin for older adults.

When I first spoke with Dr. Schwartz last year, she explained that Hygeia was assigning some of its assets to a subsidiary called Canterbury Laboratories. In my April 9 interview, she explained that Hygeia has assigned 12 assets – compounds in various stages of development – that do not have sufficiently high activity to become prescription drugs to Canterbury Laboratories.

Dr. Schwartz told me that Canterbury has licensed one such asset, currently dubbed CL-214, but soon to receive a more marketable handle, to Ferndale’s Biopelle Division that is selling so-called dermaceuticals – compounds that are not drugs approved by the FDA that nonetheless provide measurable benefits to patients.

The CL-214 compound has been shown to offset some of the negative skin damage that happens to women after menopause. According to results presented to the Dermatology Advisory Board (DAB) at a recent meeting in Maui, CL-214 restores the so-called keratinoocyte skin layer (the outermost one) to the cell count it enjoyed prior to menopause and it increases by 10 percent to 20 percent the thickness of so-called human skin explants.

The DAB was so impressed with these results that its dermatologists are offering their support for a robust set of Skin Assessments – the non-FDA equivalent of clinical trials – to demonstrate that CL-214 is not only effective in improving skin, but also does not produce any negative systemic side-effects because it acts on hormone receptors in the skin. In short, Canterbury and Biopelle will generate data from a robust set of trials to demonstrate the CL-214 works and does not cause negative side effects.

Skin care is by far the most important category in the global beauty and personal care industry. The world-wide market for so-called aesthetic products is huge.

Some estimates range from $20 billion to $34 billion. And anti-aging products continue to grow quickly. And that growth has continued despite the national economic decline in late 2008, because female consumers still wanted to look good -- resulting in market growth of anti-aging products.

Demographic trends favor continued expansion, thanks to the aging population in the United States and across the globe. Market gains are driven by a highly receptive, fast-expanding group of middle-aged customers who want “to prevent and redress visible damage to the skin caused by aging, sun damage and other environmental stressors.” There is also an increase in disposable income in emerging markets like Asia and South America, according to Euromonitor.

But CL-214 will target a much smaller segment of the market. Biopelle has conservatively estimated that CL-214 – which will be sold only in the offices of dermatologists and plastic surgeons for $200 for a two ounce jar – will conservatively generate $60 million in world-wide sales. And they plan to expand globally after they introduce the product in “late fall/early winter” of this year. Of that, Canterbury will get an annual 10 percent royalty stream, plus milestone payments.

For CL-214, BioPelle will pay Canterbury to manufacture the product, and Canterbury will also be paid to assist with the conduction of the skin assessments. However, BioPelle will incur the costs of manufacturing, distributing and selling the product to doctors. But it will have a significant amount of help from the DAB assuming that the skin assessments generate favorable results.

This is probably music to the ears of Hygeia investors. After all, many of them received shares in Canterbury, and they are no doubt delighted by the potential to realize some share of those royalties. Moreover, as Dr. Schwartz pointed out, some of those investors are Worcester dermatologists and plastic surgeons who will use CL-214 for their patients.

That’s one of the great things for a company about having investors who are also customers.